FERC on Wednesday denied rehearing of its June decision certifying the ninth Forward Capacity Auction results in ISO-NE, dealing another blow to a utility union’s claim that supply of the Brayton Point plant was illegally withheld to raise prices (EL15-1137).
Energy Capital Partners, former owner of the 1,517-MW plant, did not offer it in capacity auctions for 2017/18 and 2018/19 after announcing the plant would close in 2017. Brayton Point was sold last year to Dynegy, which said it would close the plant as scheduled.
FERC previously rejected the union’s challenge to results of FCA 8 on similar grounds. FERC said a non-public investigation by its Office of Enforcement failed to uncover any evidence of wrongdoing.
“This conclusion remains valid for FCA 9,” FERC wrote.
The commission also reiterated its acceptance of the conclusion of ISO-NE’s Internal Market Monitor that no anti-competitive behavior existed before the auction.
FERC also rejected the union’s contention that the ISO-NE Tariff requires a determination that a unit is uneconomic before it is allowed to retire.
“The Tariff contains no provision requiring a resource to demonstrate that it is uneconomic before it is allowed to retire, and UWUA does not point to any such provision. There is no test as to whether the unit can economically provide capacity, nor is there a mechanism by which ISO-NE can compel the resource to continue operating under any circumstances,” the commission wrote.
FERC has accepted NYISO’s fourth Order 1000 compliance filing, turning aside the protests of transmission developers that claimed it unfairly favored incumbent transmission owners (ER13-102-007).
LS Power and NextEra had protested the ISO’s right to terminate development agreements if a force majeure event prevents a non-incumbent developer from completing its project by the in-service date. (See Tx Developers Challenge NYISO, SPP, ISO-NE Order 1000 Filings.)
NYISO and the New York Transmission Owners submitted their fourth Order 1000 compliance filing in May. It included a pro forma development agreement for NYISO’s reliability transmission planning process.
“NYISO argues that it must have the option to terminate the development agreement and identify alternative means of satisfying an identified reliability need if a developer cannot complete its project by the required project in-service date,” FERC wrote on Dec. 23.
The commission cited a similar provision at PJM, ordering NYISO to add comparable language in its development agreements with incumbent transmission owners to prevent discrimination.
In a second order Dec. 23, FERC rejected a NYISO filing that the commission said was unfair to competitive transmission developers (ER15-2059).
FERC said the proposal “subject[s] nonincumbent transmission developers to an interconnection process with different requirements than the interconnection process that applies to incumbent transmission owners.” While all interconnection customers are required to obtain system impact and facility studies, the nonincumbents were required under the proposal to additionally submit a feasibility study and deposits for all three studies.
NYISO had argued the incumbent would have already conducted a feasibility study in its normal planning process, but FERC said that would create two different processes that are not comparable.
FERC on Monday ordered a technical conference to sort out conflicting claims over PJM’s proposed rule changes to reduce underfunding of financial transmission rights.
PJM’s proposed changes, filed in October, were challenged by the Financial Marketers Coalition and others, who said they would be ineffective and discriminatory. The commission said the conference was needed to develop more evidence before it rules (EL16-6-001, ER16-121).
The conference will explore PJM’s claim that its existing rules on FTRs and auction revenue rights are unjust and unreasonable and that the problems would be remedied by its proposed changes. Specifically, the conference will look at ARR modeling and allocation processes; treatment of portfolio positions in allocating underfunding or surplus among FTR holders; and the potential for market manipulation.
Crews install towers as part of Commonwealth Edison’s Grand Prairie Gateway project, which is expected to go into service in 2017. PJM said the need for the project might have been approved earlier under its proposed FTR rule changes.
An FTR entitles its holder to credits based on LMP differences in the day-ahead energy market when the transmission grid is congested. FTRs can be purchased or converted from ARRs, which are allocated to network and firm point-to-point customers.
PJM improved funding under current rules by modeling more transmission outages, clearing more counterflow FTRs and improving its modeling of loop flow, the alignment of the FTR, day-ahead and real-time energy markets, and market-to-market coordination with MISO.
PJM said the changes raised FTR revenue adequacy from as low as 69% during planning years 2010/11 through 2013/14 to at least 110% since the 2014/15 planning period.
However, PJM said the changes resulted in an unfair shift of revenues from ARR holders to FTR holders. It said the load-serving entities receiving reduced Stage 1B ARRs are largely different from the LSEs receiving the over-allocation of infeasible Stage 1A (10-year) ARRs.
To correct the cost shift, PJM proposed eliminating the netting of negatively valued FTRs against positively valued FTRs within portfolios. It also proposed increasing current ARR results by 1.5% annually — equal to the average ARR 10-year growth rate since 2007 — in the Stage 1A 10-year simultaneous feasibility process. (See PJM to File FTR, ARR Rule Changes with FERC.)
PJM said the changes will increase the likelihood of infeasible ARRs, potentially identifying needed transmission upgrades such as Commonwealth Edison’s Grand Prairie Gateway project sooner. The 60-mile 345-kV line through four counties in northern Illinois began construction in the second quarter of 2015 and is expected to begin service in 2017. The company says it will allow the import of cheaper wind power from the west, saving customers about $250 million net of all costs within the first 15 years.
Commenters including utilities and the Independent Market Monitor told FERC they generally supported the proposed changes. But the Financial Marketers Coalition (representing DC Energy, Inertia Power, Saracen Energy East and Vitol), Shell Energy N.A. and others protested the elimination of netting, saying PJM failed to show the current rules are unjust and unreasonable and that the change would cure underfunding.
Without netting, the coalition argued, underfunding risks would shift to those that take on counterflow FTR obligations and could encourage market manipulation.
Opponents also questioned whether the proposed 1.5% escalation would be as effective in preventing ARR infeasibilities as claimed by PJM.
[Editor’s Note: An earlier version of this article mistakenly reported that J. Aron & Co. is a member of the Financial Marketers Coalition.]
Power purchase agreements proposed by American Electric Power and FirstEnergy need changes to preserve competition and Ohio’s ability to attract merchant generation, PJM said this week.
The filings were virtually identical and offered two amendments to the eight-year agreements. The first would define a “reasonable bidding practice” as offering the output of units covered by the deals into PJM’s markets at no lower than their actual cost, with no consideration of offsetting revenue being provided by Ohio retail customers.
“Bidding at actual cost, consistent with the definition of acceptable costs included in the PJM Tariff and manuals, ensures that the PPA does not have the effect of artificially suppressing prices in any of PJM’s markets,” Stu Bresler, senior vice president of markets, said in the AEP case. The phrasing for the FirstEnergy case was changed only to reflect the term that company is using for its request, a retail rate stability rider (RRS).
Bresler also recommended that if the commission accepts the agreements, it should make clear in its order whether generation owners or their customers would bear the risk of non-performance under the new Capacity Performance model, which aims to ensure reliability by rewarding over-performing units and penalizing under-performing generators.
Bresler said PJM takes no position on the proposed stipulations but felt it necessary to weigh in on aspects that could affect its wholesale markets.
The consequences of “unreasonable” actions when selling AEP’s and FirstEnergy’s output would be “severe,” yet the agreements do not clarify “reasonable” or “unreasonable” actions, Bresler said.
“This provision, more than any other in the stipulation, has the potential to impact the PJM marketplace as a whole and the marketplace in Ohio for new investment, depending on how the provision is implemented,” he said.
PJM’s recommendations are in Ohio’s interest because the output of units covered by the agreements falls substantially short of the companies’ peak loads — 10,500 MW in AEP Ohio’s case and 11,900 MW for FirstEnergy, Bresler said. New generation resources are critical to Ohio’s future, he said, but they would be discouraged from investing in the state if others were allowed to bid below their costs.
Bowring: PPAs Inconsistent with Competition
PJM Market Monitor Joe Bowring also filed testimony, saying that the retail rate stability rider requested by FirstEnergy and AEP’s proposed power purchase agreement both “constitute a subsidy which is inconsistent with competition in the PJM wholesale power market.” He urged the commission to reject them.
The purpose of the AEP agreement, he said, “is to shift costs and risks from shareholders to customers, to remove the incentives to make competitive offers in the PJM capacity market and to provide incentives to make offers below the competitive level in the PJM capacity market.”
The agreement also does not explicitly address how AEP plans to operate within PJM’s new capacity market design.
However, Bowring said, “I would expect that the proposed PPA rider would require ratepayers to pay any performance penalties associated with the assets included in the PPA rider. I would also expect that AEP would retain any performance payments at other AEP units not included in the PPA rider, even if paid for in part by these ratepayer penalties.”
That removes the risk from shareholders, along with the incentive to manage the performance of the units, he said.
Like Bresler, Bowring expressed concern about the agreements enabling the companies to offer output into the market at artificially low prices, edging out competition.
AEP’s request, he said, indicates that PJM should expand its minimum offer price rule to include any new units with subsidies, requiring them to bid into the market at a level no lower than the cost of new entry.
Bowring also testified that the rider requested by FirstEnergy would transfer all “historic and future costs” for certain plants to ratepayers and set up the same paradigm involving its participation in PJM’s capacity market.
Together, the agreements essentially would re-regulate about 6,300 MW of generation. AEP announced its PPA on Dec. 14. FirstEnergy released its proposal Dec. 1. PUCO is expected to rule on the cases in early 2016.
EPA has overruled New York officials and ordered an additional air quality review for a dormant coal-fired power plant in the Finger Lakes region whose owners want to convert it to biomass and natural gas.
Owners of the Greenidge Generation Plant on Tuesday wrote to the New York Public Service Commission to say the EPA Region 2 administrator rejected the state’s finding that the change from coal to either biomass or natural gas is not a “major modification.”
Greenridge Plant (Source: DOE)
“The primary basis for EPA’s objection is that, if reactivated, Greenidge will be subject to the Clean Air Act’s … permit program as a new source,” EPA wrote on Dec. 7.
The 106-MW plant on Seneca Lake has been dormant for nearly four years. The owners are seeking to revive it and add a new supply line for natural gas. (See Finger Lakes Plant Seeks Gas Line for Repowering.)
The New York Department of Environmental Conservation had issued a draft permit that EPA said was incomplete.
“We strongly disagree with the EPA’s decision given that the New York Department of Environmental Conservation conducted a thorough and complete review before issuing this draft permit, concluding that Greenidge clearly meets all the federal and state standards for resuming full operation,” Greenidge spokesman Michael McKeon said in a statement. “We are currently analyzing the EPA’s response to determine how best to restart the facility as soon as possible.”
He said the company has 90 days to respond to EPA.
The state awarded Greenidge $2 million on Dec. 11 to renovate the plant in Dresden to allow it to burn 100% natural gas. McKeon said the plant would lose that grant — part of a five-year, $500 million Upstate Revitalization Initiative for the Finger Lakes region — if the delay lasts as long as a year.
The Associated Press published its findings of a yearlong investigation into the security of the U.S. power grid, and its conclusions are not heartening: About a dozen times in the last decade, foreign hackers have gained enough access to operational networks and power plants to allow them to control the flow of power over the grid.
The AP conducted more than 120 interviews with industry experts and government officials, most of whom spoke on the condition of anonymity. These sources said hackers from Iran, China and Russia have penetrated the grid and remain “stowed away” where they can strike at will. “If the geopolitical situation changes and Iran wants to target these facilities, if they have this kind of information it will make it a lot easier,” said Robert M. Lee, a former U.S. Air Force cyberwarfare operations officer.
In its report, the news service delved into one such attack on Calpine in August 2013, where hackers gained access to passwords and diagrams of multiple power plants. The AP’s sources pointed to aging network infrastructure — such as computers running on Windows 95 and boot up on floppy disks — used to manage substations and power plants that are simply unable to respond or even detect intrusions.
States, Others File Amicus Briefs in Review of CPV Contracts
More than a dozen states, associations and others filed amicus briefs with the Supreme Court last week in two federal-state jurisdictional cases pitting New Jersey and Maryland regulators against FERC.
The court said in October that it would review lower court rulings throwing out state-issued contracts Competitive Power Ventures won to build a 660-MW combined-cycle plant in Maryland and a 663-MW plant in Woodbridge, N.J. (See SCOTUS Agrees to Hear Md., NJ-FERC Subsidy Case.)
The main parties filed their briefs in early December. Last week, the court received friend of the court briefs from others including the National Association of Regulatory Utility Commissioners, the American Public Power Association, NRG Energy and officials from more than a dozen states.
House Republicans are questioning the legality of EPA’s use of social media in its climate rule campaign. While not citing any specific alleged abuses, House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said that last week’s Government Accountability Office report accusing EPA of violating the law when promoting its water rule calls into question “the use of social media to promote other rulemaking activity.”
“For example, EPA undertook an extensive social media messaging campaign in support of its Clean Power Plan, authoring blog posts and posting messages on Facebook and Twitter,” Upton said in a letter to EPA.
An EPA spokeswoman said the use of social media was aimed at educating the public, not influencing policy. “EPA stands by its outreach efforts on the Clean Power Plan,” she said.
More than Half of New Capacity was Renewable in 2014
Electricity derived from renewable sources made up more than half of the country’s new energy capacity installations in 2014, according to a report by the National Renewable Energy Laboratory.
Solar grew the fastest, increasing by more than 54% and adding 5.5 GW.
Renewable power made up 15.5% of total installed capacity and 13.5% of total generation.
The beneficial use of post-combustion coal products — more commonly known as ash — surged in 2014, mostly because of the clarification of federal regulations governing its use.
The American Coal Association said 62.4 million tons of ash, or 48% of all ash produced in 2014, were beneficially used in various applications, such as fill. That is up 21% from 51.4 million tons used in 2013.
EPA signaled in 2014 that it was rethinking coal ash’s “hazardous material” designation, spurring increased use, the association said. The agency finalized disposal regulations in December 2014 and it was designated non-hazardous. Figures for 2015 are not yet available.
Senate Confirms Cherry Murray as DOE Sciences Director
Murray
The Senate has confirmed Cherry Murray, the former dean of the Harvard School of Engineering and Applied Sciences, as the Energy Department’s new director of the Office of Science. She’ll oversee research in fusion energy, high-energy physics and nuclear physics, among other areas.
“Dr. Murray will be an outstanding director of the Office of Science, drawing upon her experience in academia as professor and dean of one of country’s leading universities of engineering and applied sciences,” Energy Secretary Ernest Moniz said. The Office of Science also oversees the department’s 17 national laboratories.
In addition to her academic positions at Harvard, Murray has served as associate director and deputy director at Lawrence Livermore National Laboratory, held positions at Bell Laboratories, and most recently served on the National Commission on the BP Deepwater Horizon Oil Spill. She received her bachelor’s and doctorate degrees from the Massachusetts Institute of Technology.
Global coal demand stalled for the first time since the 1990s because of increased renewable energy production, more stringent environmental regulations and a decline in industrial use, according to the International Energy Agency.
The agency said that China’s declining appetite for coal caused much of the stall. Although the country continues to build coal-burning power plants, it is also increasing its use of hydro, wind and solar power.
The IEA said it predicts that coal will provide a significant but shrinking share of the world’s generation, from the current 41% to 37% by 2020.
Akron Company Gets $1.3 Million from DOE for Clean Steam Plant
Ohio company Echogen Power Systems is getting a $1.3 million Energy Department grant to develop a cleaner coal-burning power plant. The government’s Supercritical Transformational Electric Power program is providing it with funding to explore the use of supercritical carbon dioxide, or carbon dioxide at high temperature and pressure.
Echogen, which operates out of a former steel company building in downtown Akron, is using supercritical carbon dioxide technology to boost waste-heat capturing systems in industrial applications. It will use the money to develop a 10-MW demonstration plant to employ supercritical carbon dioxide in a coal-burning system. It says using supercritical carbon dioxide will require less fuel and produce fewer emissions.
Construction of the plant is scheduled to start in 2019, according to Echogen.
FTC to Review Energy Transfer, Williams Cos. Merger
The Federal Trade Commission is reviewing the proposed merger of Energy Transfer Equity with The Williams Companies. The $37.7 billion merger would create the third largest energy franchise in North America.
Energy Transfer and Williams confirmed that FTC would review the proposed combination of the two pipeline giants. The deal also needs FERC approval, which would have to rule that the merger would be in the public interest.
The FTC review will determine if any antitrust issues would arise with such a merger. One legal expert, Franklin G. Snyder of Texas A&M School of Law, said he believes there will be few roadblocks. “Reports so far suggest that the antitrust problems will not be too serious and that it would likely get FTC approval, but the FTC will certainly be looking very closely,” he said.
FERC to Consider Columbia’s $1 Billion Modernization Program
Columbia Transmission, operator of a network of natural gas pipelines serving the Northeast and the Appalachian shale region, has filed a $1 billion modernization program with FERC.
Columbia said it will replace more than 130 miles of pipe, update its preventative maintenance program and add nearly 80,000 horsepower of compression to its standby fleet of compressors to increase reliability in times of high demand and cold temperatures. The proposed modernization program will reduce greenhouse gas emissions by about 20,000 tons a year, according to the company.
The company has asked FERC to approve the customer agreement surrounding the modernization program by the end of March.
The Siting Council last week issued a 16-page draft fact-finding report on the 63.3-MW fuel cell power plant Beacon Falls Energy Park. The council is expected to rule early next year on whether the plant can be built on a former sand and gravel pit.
If approved, construction of the plant would start next May, said William Corvo, president of CT Energy & Technology, a Middletown company that will own the facility once it is completed. The first phase could be done by July 2017, with completion by the end of 2019.
The plant will use 11.1 million cubic feet of natural gas a day for fuel and 300,000 gallons of water per day for fuel processing, according to the report. Fuel Cell Energy, of Danbury, will manufacture the 21 fuel cells in the project, making it the world’s largest fuel cell plant.
Bloom Energy Subsidy to be Carved out on Delmarva Bills
Delmarva Power and Light customers will begin seeing how much of their monthly bill goes to subsidize Bloom Energy under an order approved this month by the Public Service Commission.
In 2011, Delaware enlisted the California fuel cell manufacturer to build a factory in Newark by offering it $16.5 million in state funds and a 21-year subsidy from Delmarva, which buys energy from the fuel cells to meet its renewable power goals.
Bloom promised to hire 900 workers by 2017. By Sept. 30, it had employed 224. Bloom might have to return some of the $12 million it has received from the state for job creation if it doesn’t meet its workforce goal.
Commission Halts Peoples Gas Pipeline Replacement Program
The Commerce Commission has suspended an $800 million plan to replace 250 miles of Peoples Gas mains over the next three years.
WEC Energy Group purchased the parent of Peoples Gas in June, promising to spend $250 million annually on the pipeline replacement program. Attorney General Lisa Madigan, among others, has expressed fears about how the infrastructure program will impact rates of Chicago customers.
A new pipeline replacement plan is expected to be approved by the ICC by the end of 2016. In the meantime, the company will decide how much gas main work it will perform.
Residents turned up last week to protest NIPSCO’s proposed electric rate increase at a Utility Regulatory Commission regional hearing.
Hearing attendees said the utility’s proposed increase in its flat monthly customer charge from $11 to $20 would punish low- and fixed-income ratepayers. Laura Arnold, president of the Indiana Distributed Energy Alliance, said it is unclear how the utility justified the $9 increase in the fixed monthly charge.
The rate increase would generate $126.6 million in added revenue for the utility. NIPSCO’s last rate increase was in 2011. Public hearings will continue into February, when the IURC will hold an evidentiary session.
Commission Takes Steps to Clean Power Plan Compliance
The Corporation Commission has taken a first step toward figuring out how the state will comply with EPA’s Clean Power Plan, which forces states to reduce their carbon dioxide emissions.
The state has joined several dozen others in a suit to block the regulations, but it also has taken steps toward complying with it. The legislature passed a law last session requiring the KCC to provide information about each utility’s options to comply with the rules, the cost of those options and how they would affect reliability. The three KCC commissioners approved opening a general investigation docket on Dec. 3 and instructed staff to contract with a consultant to examine the options.
The process will involve a public educational session on Jan. 12 with staff from the commission, the Department of Health and Environment and the Attorney General’s office. The commission also plans other hearings and a public comment period.
Gov. Sam Brownback and other state and county leaders recently inaugurated the Buckeye Wind Energy Center, a 200-MW project northwest of Hays. The 25,000-acre wind farm, owned and operated by Invenergy, includes 112 GE 1.7X100 turbines.
During the next 20 years, Invenergy expects to pay out $30 million to the landowners for leases and $17 million to Ellis County in lieu of taxes, said Kelly Meyer, Invenergy vice president of development.
A state senator wants to impose an annual $100 tax on owners of electric cars to substitute for fuel taxes to fund road maintenance and repairs.
“If you’re using our highways, if you’re using our roads out there, you ought to help pay for them,” Sen. Joe Bowen, a Republican, said during a December committee hearing.
The Transportation Cabinet expects fuel tax collections to decline $100.4 million next year as conventional vehicles become more efficient and more electric vehicles take to the road. The National Conference of State Legislatures says that 10 states currently assess a special fee on electric car owners.
Stuart Ungar, president of EVolve KY, a group of electric car enthusiasts, said the tax would discourage electric car ownership.
South Portland officials have rejected two proposals from developers seeking to build solar power farms on city properties, including a former landfill.
One of the proposals came from Ameresco, and the other came from ReVision Energy and Energy Systems Group. City officials said neither bid offered an appealing power purchase agreement nor addressed the city’s desire to install solar arrays on nine municipal buildings.
The Public Service Commission granted a $238 million rate increase to DTE Energy that would raise the average monthly residential bill by $8.22.
The increase will help the utility finance the purchase of two natural gas-fired electric plants to replace two coal-fired plants DTE plans to close in 2016. The total rate increase for residential customers is 5.3%, while commercial customers will pay 3.4% more. Industrial customers will receive a 2.4% decrease.
PSC Chairman John Quackenbush said customers will benefit from a more reliable system and a cleaner environment.
The state’s farming community is still blocking Clean Line Energy’s $2.2 billion Grain Belt Express transmission line, which has been approved in three other states.
In July, the Public Service Commission said the project wasn’t necessary and denied Clean Line Energy’s application. The commission reportedly took into account the farmers’ concerns about crops and pastures and difficulties steering farming equipment around towers. The 780-mile HVDC line has won approval from Kansas, Indiana and Illinois, although opponents in Illinois are planning to appeal the approval process.
Clean Line says the transmission line would deliver renewable, low-cost energy to 200,000 homes in Missouri alone and help the state comply with the federal Clean Power Plan.
MC Power Companies has proposed building a 3.3-MW community solar farm in the city of Independence, which would be the largest in the Kansas City area.
Independence Power & Light would buy the energy from MC Power at a fixed price for 25 years. IPL would have the option to buy the farm after seven years. MC Power has a long-term lease for the land, said Loren Williamson, the company’s senior vice president of project development.
The City Council heard details about the proposed project Dec. 14. The ordinance for the power purchase agreement is scheduled for a vote Monday. It would bring IPL’s renewable energy production to about 13.5%, a step closer to the council’s goal of 15% by 2021.
Talen’s Share of Power Plant Drops 87% in Market Value
The market value of Talen Energy’s stake in a coal plant has declined 87% over the past two years, according to figures provided to the Great Falls Tribune by state revenue officials.
The Colstrip Steam Electric Station, partially owned by Talen Energy, has fared poorly as a merchant generator competing with cheap natural gas, according to officials. “The prospects for coal versus natural gas have deteriorated,” said Julien Dumoulin-Smith, a power sector analyst from UBS Securities.
In 2013, Talen’s stake in the Colstrip station was valued at $400 million. Today, that share is valued at $45.5 million. About three-quarters of residents in Rosebud County, where Colstrip is located, get their electricity from the plant. Diminishing revenue from the plant has prompted the county to raise taxes.
The Board of Public Utilities last week approved plans by South Jersey Gas to build a 22-mile natural gas line through the Pine Barrens without any further review. The decision came after the staff of the Pinelands Commission approved the project without putting it to the commission’s board.
The BPU’s decision raised howls of protests from environmental groups. The Pinelands Preservation Alliance called the decision “deplorable” and said it was a case of “politics and money triumphing over pinelands preservation and the public interest.” New Jersey Sierra Club Executive Director Jeff Tittel vowed his organization would appeal.
One BPU member recused himself and another was not present for the 3-0 vote. The pipeline is designed to deliver natural gas to the B.L. England generating station in Cape May County. The plant currently burns coal and fuel oil, but would be converted to gas if the pipeline is completed.
Lawmakers Deliver Votes to Cut Emissions, Rejoin RGGI
Christie
The state legislature voted on two measures to cut carbon emissions in the state, handing Gov. Chris Christie an unmistakable message that it doesn’t agree with his stance on global warming.
The Senate cleared a bill that calls for more renewable energy generation, while the General Assembly passed a resolution that calls for the state to rejoin the Regional Greenhouse Gas Initiative. Both votes were largely along party lines, with all Republicans in the Assembly voting against them.
Christie said RGGI was ineffective and represented a tax on utility customers.
Assembly to BPU: Rethink Fishermen’s Energy Project
The state legislature continued its renewable push by passing a bill that requires the Board of Public Utilities to reconsider the Fishermen’s Energy offshore wind project, regardless of its cost.
The bill would require the board to exempt the three-turbine project from a cost-benefit analysis. The vote is seen as another swipe at Gov. Chris Christie’s administration, which supported an offshore wind energy development act five years ago but whose support for renewable energy has waned since.
“The failure of the Christie administration to adopt rules for offshore wind or hold up projects like Fishermen’s Energy has cost New Jersey jobs and economic investments,” said New Jersey Sierra Club Director Jeff Tittel.
Legislators Reintroduce Bipartisan Solar Tax Credit Bill
Barnes
Two state legislators — a Senate Democrat and a House Republican — are teaming up again to push a solar energy bill that last year passed the Legislature with strong bipartisan support, only to be pocket vetoed by Gov. Susana Martinez.
Sen. Mimi Stewart and Rep. Sarah Maestas Barnes have pre-filed bills that would extend the current state solar tax credits. The 10% credit for a solar installation is set to expire at the end of 2016. These bills would extend the credit through 2024.
Although the legislation passed last year, Stewart said in an interview that she is afraid the bill could have a harder time getting out of the Senate Finance Committee. That is because falling oil prices mean less tax revenue for the state.
The Public Regulation Commission last week adopted a plan to shutter part of the coal-fired San Juan Generating Station, bringing to a close years of wrangling over the best way to curb pollution while limiting the effects on utility bills and the region’s economy.
The 4-1 vote came as environmentalists, consumer advocates, state lawmakers and lawyers for the utility that runs the San Juan plant packed a PRC hearing in Santa Fe.
Under the plan, Public Service Company of New Mexico (PNM) will be allowed to absorb excess capacity from the utilities that are divesting ownership shares in the plant. Most environmentalists and clean energy advocates had previously opposed that, but PNM agreed to a new review by regulators in 2018 to determine whether more or all of the plant should be shut down after 2022.
The solar industry on Long Island is turning its attention from residential installations to commercial systems. One of the island’s largest commercial rooftop installations was unveiled at the Clare Rose beverage distribution facility in Yaphank, a $3.5 million project that will supply more than 90% of the company’s electricity and pay for itself in less than five years. The federal tax credit for that project will exceed $1 million.
“There’s a flurry of activity right now” in the commercial sector, said David Schieren, chief executive of EmPower Solar in Island Park, one of Long Island’s largest installers. EmPower expects to see a 10% shift toward the commercial sector next year, to 40% of its overall business.
In recent years, fewer commercial customers have installed solar. The number of rebated commercial systems is down for the past three years, to just 59 as of the end of November, compared to a high of 235 in 2011. The total number of megawatts on the commercial side is increasing, however, from 4.1 MW in 2013 to 6.1 MW thus far in 2015, according to PSEG Long Island, the local utility.
The New York Power Authority has approved a deal to give cheap electricity to an aluminum smelter that had announced a plant closure. The deal will allow the Alcoa plant in Massena to stay open and save 600 jobs.
The price of power for the plant will be cut and future changes will be tied to the price of aluminum. Authority CFO Robert Laurie said the rate cut, which runs through March 2019, would cost the authority about $12 million annually in lost revenue. Laurie said the authority would likely not find another customer for as much power as the Alcoa plant consumes, which would have to be dumped onto the wholesale power market with “uncertain effects” if the plant closed.
Laurie said Alcoa will pay $12.25/MWh, the lowest electricity price of any NYPA commercial customer, and warned that other customers may approach the authority “to request similar treatment.”
Ohio University’s on-campus power plant burned its last ton of coal on Thanksgiving Day and is now heating its buildings with natural gas, a switch that was completed six weeks ahead of schedule. The university had set Dec. 31 as the deadline to switching fuels, but work on the changeover was completed early.
The university will be installing two permanent natural gas-fired boilers, a project due to be completed by September 2017. The plant’s two coal-fired boilers and the obsolete smokestack will be removed.
The university is now getting about 20% of its overall power from the temporary gas boilers, and is purchasing another 50% on the open market from renewable sources.
The Public Utility Commission named Commissioner Andrew G. Place as vice chairman, replacing John F. Coleman Jr., who will remain on the commission until his term expires in 2017. Place was nominated to the commission by Gov. Tom Wolf earlier this year, and confirmed by the Senate in September.
He came to the commission after serving as director for energy and environmental policy at EQT Corp. Place worked to form the Center for Sustainable Shale Development and held several positions at the state Department of Environmental Protection.
A newly announced EPA haze rule could cost the Coleto Creek coal-fired power plant near Victoria more than $100 million.
The federal agency announced Dec. 9 its haze regulations for the state, which require it to reduce pollutants that impair visibility in national parks and wilderness areas. Coleto Creek and six other coal-fired power plants in the state will need to make expensive upgrades or retrofits under the new rule to cut sulfur dioxide emissions.
Coleto Creek, which is owned by GDF Suez Energy Resources North America, has five years to comply with the new rule.
El Paso Electric’s proposed rate increase should be reduced almost $48 million, or 67% less than the utility has sought, the City of El Paso said in documents filed with the Public Utility Commission.
The city is asking the PUC to reduce the utility’s rate request from $71.5 million to $23.5 million, which would result in an overall rate increase of 5.5%, compared to the utility’s proposed 16.6% increase.
The city also is asking the PUC to reject the utility’s proposal to establish a special rate class for residential customers with rooftop solar systems, which would increase those customers’ rates more than regular residential customers.
Carbon Capture Project Gets Important Land Agreement
Odessa Development Corp. voted to extend the land agreement with Summit Power Group, allowing the company to build a $2.5 billion power plant that captures and stores carbon on a 600-acre site.
Summit officials signed contracts Dec. 7 with the primary companies that will construct the Texas Clean Energy Project, which will sell power, CO2, urea and sulfuric acid. Summit still must raise funding to build the plant, and it is targeting financial closing in spring 2016.
Before the extension becomes final, Summit must also gain the approval of Grow Odessa, the non-profit organization that initially acquired the proposed Summit site. The Odessa City Council has already approved the extension.
Green Mountain Power says it will build a manure digester in St. Albans that will turn cow dung from three farms into electricity and reduce phosphorous pollution into Lake Champlain.
The $8 million project, which will generate enough electricity from methane gas to power about 700 homes, will help meet about one-third of EPA’s target for reducing farm phosphorous runoff into St. Albans Bay.
EPA this summer set new pollution reduction goals for the state’s side of the lake. The digester process will remove much of the phosphorous from the manure. The fibrous byproduct from the process will be turned into animal bedding.
A bill that would authorize new construction of nuclear reactors in the state was introduced Dec. 14 in both houses of the Legislature. Supporters say zero-emissions nuclear energy sources are needed under the Clean Power Plan, while critics of the legislation say building nuclear plants is an expensive way to comply with the federal carbon-reduction mandate.
WEC Energy Group said new sources of power wouldn’t be needed for at least 10 years, given the company’s recent completion of new plants. Republican State Rep. Kevin Peterson said during a legislative hearing that his bill “simply reopens the door to technology that has advanced well beyond what it was when our state closed that door 30-plus years ago.”
During Gov. Scott Walker’s 2010 campaign, he promised to end the state’s more than 30-year moratorium on erecting nuclear plants. Currently, 13% of the state’s electricity supply comes from nuclear sources.
WASHINGTON — With low oil and gas prices crimping the petroleum industry’s budgets, two major energy lobbying groups are combining forces. The American Petroleum Institute and America’s Natural Gas Alliance will begin 2016 as a single organization under the API banner.
The move appears to be driven by a desire by members of ANGA — a smaller, newer organization — to trim costs. Seven of the 17 members listed on ANGA’s website are also API members.
API, founded about 85 years ago, has more than 625 members, including refiners, suppliers and pipeline operators. In 2013, according to its IRS filings, it had a staff of about 300 and a $49 million payroll, one-fifth of its $238 million budget.
ANGA, founded in 2009, has a staff of about 22 representing 17 dozen independent natural gas exploration and production companies. It reported $7.2 million in payroll in its $67 million budget for 2013.
Ominously, ANGA’s biggest source of income, program service revenue — dues — dropped by more than a quarter in 2013, from $76.7 million in 2012 to $56.5 million in 2013. API’s program service revenue dropped from $225 million to $210 million over the same period.
ANGA ran an operating deficit of more than $10 million in 2013, following a shortfall of $7 million in 2012 — this after running a surplus of $53 million as recently as 2010.
Data for 2014 is not yet available.
Jack Gerard (Source: API)
“As a single organization, the combined skills and capabilities bring an enhanced advocacy strength to natural gas market development,” API CEO Jack Gerard, who will remain in his position, said in a statement. “The combined association’s expanded membership will provide additional lift to API’s ongoing efforts on important public policy issues.”
ANGA president Marty Durbin will lead a new group at API that will handle the gas lobby’s interests. ANGA members not already affiliated with API will become full members.
The organizations did not return requests for comment on whether the merger would result in layoffs. In an email to “colleagues” Tuesday, Durbin named four ANGA staffers he said would be joining him in the transition, promising they would provide “a continued high level of engagement and expertise.”
Gerard earned $14.1 million in 2013. Durbin earned $767,000 after becoming CEO in May of that year.
According to The Hill, API spent $9 million lobbying Congress last year — more than any other energy trade group — while ANGA spent $1.4 million.
Congress’ approval last week of a repeal of the decades-long ban on crude oil exports gave API a rare chance to celebrate lately. It said the legislation “will help bring U.S. energy policy into the 21st century.”
FERC ordered MISO Thursday to post its day-ahead market results earlier, saying the RTO’s current schedule doesn’t allow gas-fired generators enough time to procure fuel.
The commission said MISO had failed to comply with Order 809, which moved the timely nomination cycle deadline for gas to 1 p.m. CT from 11:30 a.m.
The commission ordered MISO to move the posting of its day-ahead market results “at least” 30 minutes earlier to 12:30 p.m. CT. It also ordered the RTO to set a notification time for its forward reliability assessment commitment (FRAC) that is “sufficiently in advance” of the gas evening nomination cycle (ER15-2256 and EL14-25).
In separate orders, FERC accepted Order 809 compliance filings by SPP and CAISO. Order 809, issued in April, also added a third intraday nomination cycle. (See FERC Approves Final Rule on Gas-Electric Coordination.)
MISO Filing
MISO submitted a compliance filing in July that proposed posting day-ahead market results one hour earlier at 1 p.m. CT and the FRAC notification time two hours earlier to 5 p.m. CT. It also proposed moving its day-ahead market trading deadline one hour earlier during daylight saving time, so that the deadline would be 10 a.m. CT year-round.
The RTO also proposed reducing the day-ahead market solve time from four hours to three, saying that would meet Order 809’s requirement for posting post market results “sufficiently in advance” of the evening nomination cycle to allow gas-fired generators to obtain fuel and pipeline capacity while minimizing the impact on market participants.
MISO said the earlier publication of the day-ahead results would reduce costs by making up to 1,600 MW of longer lead notification generation capacity available. Similarly, the 5 p.m. CT FRAC notification time would allow consideration of up to 4,214 MW of longer lead notification resources.
MISO said its proposals were an effort to balance the Order 809 requirements against stakeholder preferences to maintain a day-ahead market deadline no earlier than 10 a.m. CT. Because most of its footprint operates in the Central Time Zone, MISO said, market participants use the morning hours to determine generation availability, develop forecasts and formulate bids and offers.
FERC not Persuaded
FERC said posting results ahead of the evening gas nomination cycle is not a substitute for posting in advance of the timely nomination cycle, which it said is “the most liquid time to acquire both natural gas supply and pipeline transportation capacity.” MISO’s proposed day-ahead notifications would overlap with the timely gas deadline, leaving generators no time to submit nominations.
The commission said MISO failed to demonstrate that moving its posting at least 30 minutes earlier “will be unduly burdensome or disrupt its markets.”
While MISO said it was not currently experiencing the gas scheduling challenges faced by PJM and the Northeast markets, FERC said, it had “recognized that in the future it could have scheduling difficulties as coal-fired plants retire.”
“For at least part of the year, MISO, like PJM, NYISO and ISO-NE, generally schedules its day-ahead market using Eastern Prevailing Time, which means that it has more time compared to SPP and CAISO during the morning hours to complete its day-ahead schedule in time to meet the 2 p.m. ET (1 p.m. CT) revised timely nomination cycle deadline,” the commission said. “Thus, it is not apparent how requiring MISO to move its day-ahead posting deadline in advance of the timely nomination cycle places an undue burden on the staffs of MISO and its stakeholders.”
The commission acknowledged that MISO’s stakeholders generally prefer to purchase natural gas during its most liquid period (natural gas price certainty) over being able to obtain pipeline service during the timely nomination cycle (quantity certainty). It said MISO should work with stakeholders to reduce its market solve times further “to allow market participants to submit bids reflecting increased fuel price certainty.”
MISO has 30 days to submit a new compliance filing.
SPP Change Approved
FERC, meanwhile, accepted Tariff revisions SPP submitted in August that moved the deadline for day-ahead market offers up 90 minutes to 9:30 a.m. CT (ER15-2377).
The RTO will now post day-ahead results at 2 p.m. CT, up from 4 p.m., and shorten the reoffer period to 45 minutes, with reliability unit commitment (RUC) offers due at 2:45 p.m. CT and results posted by 5:15 p.m. (See “Board Approves Gas-Electric Timeline Change” in SPP BoD/Members Committee Briefs.)
FERC said SPP had “identified characteristics on its system that justify its proposal not to publish its day-ahead market results prior to the timely nomination cycle,” noting its low risk of natural gas pipeline constraints and the impact changes would have on weather forecasting for its “extensive wind resources.”
The commission ordered SPP to submit an annual informational report for the next three years on its efforts to further align its gas and electric scheduling practices. SPP staff have said they can implement the changes — which will require new software — by next fall. The work is being done in conjunction with an enhanced combined-cycle project, at an estimated combined cost of $7.7 million. (See “Enhanced Combined-Cycle Project Moves Forward” in Board of Directors/Members Committee Briefs.)
No Change for CAISO
The commission also said CAISO had shown good cause why its existing day-ahead practices should not be changed (EL14-22).
CAISO’s July compliance filing said its load-serving entities feared less accurate supply forecasts with an earlier start to the day-ahead market. FERC agreed, saying “moving the close of the day-ahead market earlier could reduce the accuracy of demand, hydroelectric supply and variable energy resource output forecasts.”
The ISO’s day-ahead market closes at 10 a.m. PT and market results are published at 1 p.m. PT.
As with SPP, the commission ordered annual informational reports on CAISO’s efforts to improve coordination of gas and electric schedules.
The 9th Circuit Court of Appeals last week sided with FERC in the latest chapter of the long-running legal dispute over the California-West Coast energy crisis of 2000-2001.
A three-judge panel declined to overturn FERC’s decision to apply the Mobile-Sierra doctrine — which presumes that the rate set in a freely negotiated wholesale-energy contract is just and reasonable — in determining whether Pacific Northwest power buyers are entitled to refunds.
The judges also dismissed a challenge to the scope of evidence FERC considered in the Mobile-Sierra review, saying the issue was not ripe for its review.
California Deregulation
The case before the 9th Circuit stems from the turmoil that followed California’s deregulation of the electricity market in the mid-1990s, which resulted in skyrocketing spot prices in California and the Pacific Northwest, largely driven by market manipulation by Enron and other power marketers.
The petitioners, which include the city of Seattle, challenged several FERC orders issued following the 9th Circuit’s 2007 remand of the Port of Seattle case. In that case, the court reviewed challenges to FERC’s denial of refunds to wholesale buyers that purchased power in the Pacific Northwest spot market at unusually high prices.
The court ruled that FERC’s failure to consider evidence of market manipulation was arbitrary and capricious. FERC had to “consider the possibility that the Pacific Northwest spot market was not … functional and competitive,” the court ruled.
FERC was ordered to examine evidence of market manipulation “in detail and account for it in any future orders regarding the award or denial of refunds in the Pacific Northwest proceeding.”
In response, FERC said it would invoke the Mobile-Sierra doctrine, meaning the presumption that the contracts were just and reasonable could be overcome only if specific criteria were met, such as “where it can be shown that one party to a contract engaged in such extensive unlawful market manipulation as to alter the playing field for contract negotiations.”
FERC’s invocation of the Mobile-Sierra presumption meant electricity buyers would need to “demonstrate that a particular seller engaged in unlawful market activity in the spot market and that such unlawful activity directly affected the particular contract or contracts to which the seller was a party.”
FERC said it would not consider “general allegations of market dysfunction” because the Pacific Northwest spot market operated solely through bilateral contracts, unlike the California spot market, which used a central clearing price and a centralized power exchange.
In last week’s order, the court rejected FERC’s contention that it lacked jurisdiction to review the commission’s application of Mobile-Sierra. But it deferred to what it called “FERC’s reasonable determination” that Mobile-Sierra applies to short-term sales.
“The mere short-term nature of these spot sale contracts does not render FERC’s application of the Mobile-Sierra doctrine unreasonable,” the court said. “Although long-term contracts may play a special role in stabilizing the energy market … the Supreme Court has drawn the rule so that the presumption may be invoked with regard to any contracted for rate.”
Evidentiary Challenges not Ripe
The court said, however, that it lacked jurisdiction to rule on the petitioners’ challenges to restrictions that FERC imposed on the evidentiary proceeding. The petitioners said they should be permitted to introduce evidence of reporting violations, violations of obligations under the Uniform Commercial Code and state contract law, and violations by sellers that were not parties to the challenged contracts.
The court said the evidentiary orders are preliminary and lack the “definitive substantive impact” required for the court to assert jurisdiction.
It noted that “FERC has already shifted course on the ‘shape’ of the proceeding in a way that suggests some elements of its orders may not be sufficiently final for review. … Significantly, it appears that despite arguments raised by the petitioners, at least some evidence of bad faith may have been admitted in the [evidentiary] proceeding.”
The court said FERC’s final order resulting from the remand hearing will be reviewable and will allow a “more effective review of the evidentiary decisions since the court will be able to review all of the evidence taken together.”
House Republicans are questioning the legality of EPA’s use of social media in its climate rule campaign. While not citing any specific alleged abuses, House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said that last week’s Government Accountability Office report accusing EPA of violating the law when promoting its water rule calls into question “the use of social media to promote other rulemaking activity.”
Electricity derived from renewable sources made up more than half of the country’s new energy capacity installations in 2014, according to a 
The beneficial use of post-combustion coal products — more commonly known as ash — surged in 2014, mostly because of the clarification of federal regulations governing its use.
Global coal demand stalled for the first time since the 1990s because of increased renewable energy production, more stringent environmental regulations and a decline in industrial use, according to the International Energy Agency.
Ohio company Echogen Power Systems is getting a $1.3 million Energy Department grant to develop a cleaner coal-burning power plant. The government’s Supercritical Transformational Electric Power program is providing it with funding to explore the use of supercritical carbon dioxide, or carbon dioxide at high temperature and pressure.
The Siting Council last week issued a 16-page draft fact-finding report on the 63.3-MW fuel cell power plant Beacon Falls Energy Park. The council is expected to rule early next year on whether the plant can be built on a former sand and gravel pit.
Delmarva Power and Light customers will begin seeing how much of their monthly bill goes to subsidize Bloom Energy under an order approved this month by the Public Service Commission.
The Commerce Commission has suspended an $800 million plan to replace 250 miles of Peoples Gas mains over the next three years.
Residents turned up last week to protest NIPSCO’s proposed electric rate increase at a Utility Regulatory Commission regional hearing.
The Corporation Commission has taken a first step toward figuring out how the state will comply with EPA’s Clean Power Plan, which forces states to reduce their carbon dioxide emissions.
Gov. Sam Brownback and other state and county leaders recently inaugurated the Buckeye Wind Energy Center, a 200-MW project northwest of Hays. The 25,000-acre wind farm, owned and operated by Invenergy, includes 112 GE 1.7X100 turbines.
South Portland officials have rejected two proposals from developers seeking to build solar power farms on city properties, including a former landfill.
The Public Service Commission granted a $238 million rate increase to DTE Energy that would raise the average monthly residential bill by $8.22.
The state’s farming community is still blocking Clean Line Energy’s $2.2 billion Grain Belt Express transmission line, which has been approved in three other states.
The market value of Talen Energy’s stake in a coal plant has declined 87% over the past two years, according to figures provided to the Great Falls Tribune by state revenue officials.
The Board of Public Utilities last week approved plans by South Jersey Gas to build a 22-mile natural gas line through the Pine Barrens without any further review. The decision came after the staff of the Pinelands Commission approved the project without putting it to the commission’s board.
The state legislature continued its renewable push by passing a bill that requires the Board of Public Utilities to reconsider the Fishermen’s Energy offshore wind project, regardless of its cost.
The Public Regulation Commission last week adopted a plan to shutter part of the coal-fired San Juan Generating Station, bringing to a close years of wrangling over the best way to curb pollution while limiting the effects on utility bills and the region’s economy.
The solar industry on Long Island is turning its attention from residential installations to commercial systems. One of the island’s largest commercial rooftop installations was unveiled at the Clare Rose beverage distribution facility in Yaphank, a $3.5 million project that will supply more than 90% of the company’s electricity and pay for itself in less than five years. The federal tax credit for that project will exceed $1 million.
Ohio University’s on-campus power plant burned its last ton of coal on Thanksgiving Day and is now heating its buildings with natural gas, a switch that was completed six weeks ahead of schedule. The university had set Dec. 31 as the deadline to switching fuels, but work on the changeover was completed early.
A newly announced EPA haze rule could cost the Coleto Creek coal-fired power plant near Victoria more than $100 million.
El Paso Electric’s proposed rate increase should be reduced almost $48 million, or 67% less than the utility has sought, the City of El Paso said in documents filed with the Public Utility Commission.
Odessa Development Corp. voted to extend the land agreement with Summit Power Group, allowing the company to build a $2.5 billion power plant that captures and stores carbon on a 600-acre site.
Green Mountain Power says it will build a manure digester in St. Albans that will turn cow dung from three farms into electricity and reduce phosphorous pollution into Lake Champlain.
